Hi friends, Please let me know that How to calculate basic salary ?

calculation of basic salary varies from company to company, like i am working in group where in one unit basic is calculated as 60 % of gross while in other unit there is formula mentioned below:

HRA - 25 % OF BASIC

LTA - 8.33 %

MEDICAL - 8.33 %

PF - 12 %

GRATUITY - 4.81 %

BONUS - 8.33 %

FIRST WE SUM UP ALL THE AFORESAID PERCENT, HERE IT IS (66.8 %)

FORMULA (BASIC SALARY) = GROSS SALARY * 100 / 166.8

THIS IS HOW IT VARIES FROM ORGANISATION TO ORGANISATION.

REGS,

NIDHI

calculation of basic salary varies from company to company, like i am working in group where in one unit basic is calculated as 60 % of gross while in other unit there is formula mentioned below:

HRA - 25 % OF BASIC

LTA - 8.33 %

MEDICAL - 8.33 %

PF - 12 %

GRATUITY - 4.81 %

BONUS - 8.33 %

FIRST WE SUM UP ALL THE AFORESAID PERCENT, HERE IT IS (66.8 %)

FORMULA (BASIC SALARY) = GROSS SALARY * 100 / 166.8

THIS IS HOW IT VARIES FROM ORGANISATION TO ORGANISATION.

REGS,

NIDHI

As rightly said, there is n't any hard and fast rules for calculating the basic pay.

The current scenario is If the Basic pay is less than Rs 3500, the employer has to pay the minimum Statutory bonus ranging from 8.33%. Hence the employer makes the minimum basic of Rs 3600 and above. With effect from new parliamentry note of Basic revision to Rs 10000 towards Statutory bonus is still to be worked out.

However here are the few tips:

1. Basic Salary would depends on the designation level of the person.

2. Basic is usually fixed depending on the CTC (cost to the company). This can range from 20 to 60%.

3. Advisable to have optimum level to basic salary and get this standardized across the grades / levels for operational convinience & PF remittence which will affect employee's take home

4. Once the basic pay is fixed we can fix the other components with the required percentages (HRA, Other allowance, Medical, LTA, Reimbursemnts, etc

The salary structure will go as follows:

Basic Salary: 30 % - 50% of the CTC (Cost to Company)

HRA: 50% of Basic

Dearness Allowance: Most Company Will not have this parameter

This (D.A) will be alloted by the Government

D.A is fully taxable

Transport Allowance: Upto 8000/month is not taxable

Telephone Charges: Fully Taxable

Deputation Allowance: Completely Taxable

Annual Medial reimbursement: Rs.15,000/-

Gross Salary + Statuory like PF = CTC

Gross - Deductions = Take Home

Hope this will help you

Best Regards

Isaac Patturaja

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